FICCI Economic Outlook Survey – May 2011

About the Survey

The sixth round of FICCI’s Economic Outlook Survey was conducted during
May 2, 2011 to May 26, 2011. As part of the survey, a structured
questionnaire was drawn up and sent to key economists with a view to
gauge their perception and views on topical economic issues as well as to
seek their outlook for key macro-economic variables. 12 economists of
repute participated in the survey. These economists largely come from the
banking and financial sector. The sample also includes economists from
industry and research institutions.

The economists were asked to provide their forecast for key macro
economic variables for the year 2010-11 and 2011-12 as well as for
Quarter 1 (Apr-June) of 2011-12.

In addition to these, FICCI sought the views of economists on three topical

issues – the inflation rate around which the central bank should take
a pause with regard to tightening of key policy rates; considering a
‘new normal’ range of 6 to 7 percent for inflation and dip in FDI
inflow to India.

The feedback received from the participating economists was aggregated

and analyzed. The results obtained are presented in the following pages.

The findings of the survey represents the views of the leading

economists and do not reflect the views of FICCI.
FICCI Economic Outlook Survey –May 2011

Executive Summary

Annual Forecasts of GDP at Factor Cost for 2010-11

♣ GDP growth – 8.6 percent

♣ Agriculture and allied activities growth – 5.4 percent

♣ Industry growth – 8.1 percent

♣ Services growth – 9.6 percent

Annual Forecasts for 2011-12

♣ GDP growth – 8.0 percent

♣ Agriculture and allied activities growth – 3.7 percent

♣ Industry growth – 8.0 percent

♣ Services growth – 9.2 percent

♣ Fiscal Deficit – 5 percent of GDP

♣ Prime Lending Rate- 5.0 percent

♣ WPI Inflation rate (end march 2011) –6.7 percent

♣ IIP – 7.9 percent

♣ Trade Balance – (-) 7.7 percent

♣ Current Account Deficit – (-) 2.8 percent of GDP

♣ USD/ INR exchange rate (end March 2012) – Rs. 43.7 /USD

Quarterly Forecasts for Q4 of 2010-11 and Q1 of 2011-12

♣ GDP growth – 8.2 percent (Q4, 2010-11), 8.1 percent (Q1, 2011-12)

♣ Agriculture and allied activities growth – 5.8 percent (Q4, 2010-11), 4.0
percent (Q1, 2011-12)

♣ Industry growth – 5.3 percent (Q4, 2010-11), 6.5 percent (Q1, 2011-12)

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 ♣ Services growth –10.1 percent (Q4, 2010-11), 9.3 percent (Q1, 2011-
12)

♣ Prime Lending Rate – 9.3 percent (Q1, 2011-12)

♣ WPI inflation rate – 9.1 percent (Q1, 2011-12)

♣ IIP – 6.8 percent (Q1, 2011-12)

♣ Trade Balance- (-) 8.6 percent (Q1, 2011-12)

♣ USD / INR exchange rate – Rs. 45 / USD (Q1, 2011-12)

FICCI Economic Outlook Survey –May 2011

Executive Summary

Economists’ views on …

♣ The inflation rate around which the central bank should take a
pause with regard to tightening of key policy rates

• Majority of the economists said that the RBI should stop its current
anti- inflationary rate hikes when the inflation moderates to around 7
percent to 7.5 percent. They expect that the RBI will further increase the
repo rate by another 50-75 bps in this rate hike cycle.

• The survey participants feel that inflation may further accelerate over
the first half of the fiscal year because of the expected increase in
diesel/ LPG / kerosene and also the supply side mismatches in some
commodities like vegetables, fruits, pulses, milk and eggs.

• The economists estimate that though the inflationary pressures are

expected to persist in the near term, it is likely to moderate to the
around 7 percent by the end of fiscal year 2011-12 because of

o Expected stability in the international crude oil price as the

overreaction in oil prices to the problems in the Middle – East is
calming down
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 o Likely downward movement in the international commodity
prices

o Expected measures to be taken by the domestic government to

improve supply side bottle necks

o Possible lagged impact of the successive policy rate hikes

coming in to play and impinging on demand side pressure of the
inflation

• Some of the economists strongly suggested that RBI should target only
non- food inflation and not the food inflation. They recommended that a
pure monetary approach to manage the inflation arising of supply side
rigidities is a wrong approach and it is the duty of the government to
make the effort to bring down the food inflation

♣ Considering a ‘new normal’ range of 6 to 7 percent for inflation

• Though there was a mixed reaction amongst economists on

considering a ‘new normal’ for inflation, majority of the economists agreed
that Indian economy has to accept a new normal. While most of them agreed
to a 6 percent level as the new normal, few economists said it could be even a
7 percent mark considering the changing trend of inflation as well as the
structural demand – supply mismatches.

• Few of the economists opposed the consideration of a new normal level for
WPI inflation because, setting a higher normal level will only prevent a push for
structural reforms that are urgently needed to reduce the general level of
inflation and also will exacerbate inflationary expectations

• They further suggested that government may continue to bring down the
current inflation by debottlenecking the agriculture sector by taking urgent
steps to increase productivity and improving supply side management of food
products. Also to tame the inflation in the manufactured products, steps must
be taken to augment supplies of industrial inputs via greater investments in
these sectors

♣ Recent dip in FDI inflow and outlook for FDI inflows in 2011-12

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 • Survey captured following reasons for the dip in FDI inflows to India
during 2010-11:

o General slowdown in the international market: Re- emergence of

sovereign debt related issues in the Euro zone, weak recovery of
the US economy and problems in Japan led to uncertainties in
the global market
o Expected slowdown in the domestic market: India’s
macroeconomic stability coupled with the large potential of
market was a big lead in attracting the FDI flows. However, RBI
has echoed that growth may have to slowdown in order to tame
the high inflation. This could have prompted the investors to wait
and watch how the domestic situation spans out
o Emergence of other competent economies: India received a good
FDI inflow during 2009-10, soon after the global melt down, as
the country was seen as the brightest destination amongst the
emerging markets. However, as the world economy recovers,
funds are moving to other competent emerging economies as
well, posing a reduction in FDI flow to India.
o Governance issues: Respondents feel that the factors that might
have affected investors sentiments in the recent past could be
the environment and land sensitive policies and spate of
corruption scandals
o Regulatory uncertainties: Foreign investors planning to enter the
retail space as well as banking in India or increasing their stake
in insurance ventures have been awaiting the required policy
changes for over a decade. This have vitiated the investment
climate in the country

• Against this back drop most of the surveyed economist expect that the
FDI inflow to India during the fiscal year 2011-12 will remain subdued.
However, economists are optimistic that fuller recovery in the mature
economies, together with Indian Government’s action on easing
barriers and improving the ease of doing business could increase FDI
inflows in the future.

FICCI Economic Outlook Survey –May 2011

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 ♣ Annual Forecasts of GDP at Factor Cost for 2010-11
7

♣ Quarterly Forecasts of GDP at Factor Cost for Q4 (Jan-Mar) of

2010-11 8

♣ Annual Forecasts for 2011-12

9

♣ Quarterly Forecasts for Q1 (Apr-June) of 2011-12

11

♣ Economists’ views on the inflation rate around which the

central bank

should take a pause with regard to tightening of key policy rates

13

♣ Economists’ views on considering a ‘new normal’ for inflation

15

♣ Economists’ views on dip in FDI inflow and outlook for FDI inflow in
2011-12 16

TABLES

♣ Annual Forecasts of GDP at Factor Cost for 2010-11

18

♣ Annual Forecasts for 2011-12

18

♣ Quarterly Forecasts of GDP at Factor Cost for Q4 (Jan-Mar) of

2010-11 19

♣ Quarterly Forecasts for Q1 (Apr-June) of 2011-12

19

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FICCI Economic Outlook Survey –May 2011

♣ Annual Forecast of GDP at Factor Cost for 2010-111

• The economists who participated in the 6th round of FICCI’s Economic

Outlook Survey (May 2011) expects the GDP growth (at factor cost) for
the year 2010-11 to be 8.6 percent. It is interesting to note that in the
last survey (January 2011) the GDP was estimated to be at 8.7 percent for
2010-11, which is very close to the present estimation.

• While the economists keep the aggregate GDP estimation more or less
unchanged since January, the sector wise GDP figures show some revised
assessment. The respondents anticipate that the agriculture and allied
activity would clock a growth of 5.4 percent in 2010-11 which is a
percent point higher than their previous survey estimate. The range of the
forecast for agriculture and allied sector growth lies between a minimum of
5.0 percent to a maximum of 6.5 percent

• However, the participants revised the growth of Industry

downwards to 8.1 percent for 2010-11 in this survey from 8.6 percent
for the same period in the last survey. Further, the service sector growth
is expected to see a growth of 9.6 percent during the fiscal 2010-11.
This remains unchanged from the preceding survey forecast. The service
sector growth projection varied from a minimum of 9.2 percent to a
maximum of 11.0 percent

Estimate of GDP (at Factor Cost) for 2010-

11

Variable Estimate Estimat

in January e in
2011 May
1
All forecast figures indicated are the median forecast of the sample

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 2011

GDP growth rate at factor 8.7 8.6

cost (%)
Agriculture & Allied 4.4 5.4
Industry 8.6 8.1
Services 9.6 9.6

FICCI Economic Outlook Survey –May 2011

♣ Quarterly Forecasts of GDP at Factor Cost for Q4 (Jan-Mar) of

2010-112

• Economists estimate the GDP growth at factor cost for the fourth
quarter of fiscal 2010-11 to be at 8.2 percent. This forecast remains
unchanged compared to the predictions made in the previous survey for
quarter 4. The growth forecast varied within the range of 7.4 percent to 8.5
percent

• The sectoral break- up of GDP growth projections indicate that

agriculture and allied activities would grow at 5.8 percent during
quarter 4 of 2010-11. This is higher than the 5.0 percent projection which
was estimated in the last survey. The primary sector’s projection showed a
wide variation from a minimum of 4.6 percent to a maximum of 8.7 percent

• The industry sector seems to register a growth of 6.7 percent

in the last quarter of 2010-11. This estimate is slightly higher than the

2
All forecast figures indicated are the median forecast of the sample. Sample size varies as
not all participants provided quarterly projections and for all variables
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6.5 percent projection made in the previous survey. The range of the
forecast is between 4.0 percent and 6.7 percent

• Economists foresee a higher growth in service sector at 10.1

percent during Q4 of 2010-11 against the earlier projection of 9.5 percent
for the same sector. The growth estimates for this sector varied within 9.7
percent to 10.5 percent

Estimate of GDP (at Factor Cost) for Quarter 4 of

2010-11

Variable Estimate Estimat

in January e in
2011 May
2011
GDP growth rate at factor 8.2 8.2
cost (%)
Agriculture & Allied 5.0 5.8
Industry 6.5 5.3
Services 9.5 10.1

FICCI Economic Outlook Survey –May 2011

♣ Annual Forecast for 2011-123

• Economists foresee a lower GDP growth during the fiscal 2011-12

compared to 2010-11. The aggregate GDP growth (at Factor cost) has
been projected to be 8.0 percent for 2011-12 compared to 8.6 percent

3
All forecast figures indicated are the median forecast of the sample

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growth in 2010-11. The survey forecast varied between a minimum of 8.0
percent to maximum of 8.8 percent

• A sector wise break – up shows that the estimate for agriculture

and allied activities to be low at 3.7 percent in 2011-12. This estimate
was high at 5.4 percent for the year 2010-11. The range of projection varied
from a minimum of 2.2 percent to 4.2 percent

• Survey respondents expect the Industry sector to show a more or less

same growth performance in the current fiscal compared to the previous
year. The growth estimate for the industry sector is 8.0 percent in
2011-12 which is slightly lower than the estimate of 8.1 percent for 2010-
11. The forecasts were ranging from 7.0 percent to 8.7 percent

• Economists project the fiscal deficit to be 5.0 percent of GDP

for the year 2011-12. This is higher than central government’s budget
estimate of 4.6 percent. The projection for fiscal deficit lie between the
range of 4.8 percent to 6.5 percent

• Participants of the survey foresee the WPI inflation to be moderating

towards end March 2012. WPI inflation at the end of financial year
2011-12 is projected to be 6.7 percent which is much lower than the
current level. The inflation rate forecast varied between a minimum of 5.0
percent to a maximum of 7.2 percent.

• Industrial production which is measured by the growth in IIP for the

year 2011-12 has been pegged at 7.9 percent. The range within which
the forecast has been made varied from 6.5 percent to 9.1 percent.

• Economists see a balanced movement in the export and import growth

of the economy. While exports are projected to grow at 20.0 percent,
imports are estimated to grow along the same

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rate of 20.3 percent during 2011-12. Trade balance is expected to
be at a negative territory of 7.7 percent of the GDP during the same
period. Forecasters did not vary much on the projection of the trade balance
that it ranged from (-) 7.4 to (-) 7.8 percent.

• Current Account Deficit is estimated to be 2.8 percent during

the fiscal 2011-12. The forecasts for this varied between a minimum of 2.5
percent to 3.3 percent.

• The forecast predicts that the exchange rate of rupee would be

around 43.7 per USD by end March 2012.

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FICCI Economic Outlook Survey –May 2011

♣ Quarterly Forecasts for Q1 ( Apr- June) of 2011-124

• The participating economists anticipate the GDP growth to be 8.1

percent during the first quarter of 2011-12. This prediction of
aggregate GDP growth rate is more or less in line with the 8.2 percent
growth forecast by the economists for the last quarter of 2010-11. The
forecast ranges from a minimum of 7.4 percent to a maximum of 8.6
percent.

• The forecast for sector wise GDP growth for Q1 of 2011-12 shows
significant upward and downward movements compared to the previous
quarter, i.e, Q4 of 2010-11. Economists see a slip in growth of agriculture
and allied activities in the Q1 of 2011-12 and estimated the primary
sector growth to be 4.0 percent. This is lower than the 5.8 percent
estimate for Q4 of 2010-11. The estimates varied within a range of 3 percent
to 5.9 percent.

• However, respondents are optimistic about the growth of Industry

sector and expect the same to be 6.5 percent during first quarter of
2011-12. This is higher than their prediction of 5.3 percent growth for the
last quarter of 2010-11. The sample size showed a variation in projections
from 5.0 percent to 7.2 percent growth for the Industry sector.

• Projections received from participants show a lower growth rate for

service sector for first quarter of 2011-12 compared to the previous quarter.
It is estimated that service sector will grow at 9.3 percent during Q1 of
2011-12 against 10.1 growth projected in Q4 of 2010-11.

4
All forecast figures indicated are the median forecast of the sample. Sample size varies as
not all participants provided quarterly projections and for all variables
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• The participating economists anticipate the WPI inflation level to
continue at its current level during the first quarter of 2011-12. They have
estimated the inflation level to be at 9.1 percent showing no signs of
moderation in the initial quarter of current fiscal.

• For Q1 of 2011-12, the growth in IIP is forecasted to be 6.8

percent. This estimate for industrial production is more or less in sync with
the growth prediction of 6.5 percent for the industrial sector GDP for the
same quarter. The range of the IIP projections received shows that it could
be as low as 5.3 percent and go up to 8.8 percent during this period.

• Economists anticipate the exports to grow slightly faster than the

imports. While they predict the exports to growth at 30 percent during
first quarter of 2011-12, the imports is expected to register a
growth of 25 percent during the same period. Also, while the
projection range did not show much variation in export growth, the range for
import growth varied between a minimum of 20 percent to a maximum of 30
percent. Trade balance for the first quarter of 2011-12 is perceived
to stand at -8.6 percent.

• The median forecast predict that exchange rate of rupee would be

around 45 per USD in the first quarter of 2011-12. The annual forecast
for exchange rate of rupee is 43.7 per USD shows the exchange rate might
come down in the coming quarters of 2011-12.

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FICCI Economic Outlook Survey –May 2011

♣ Economists’ views on the inflation rate around which the

central bank should take a pause with regard to tightening of key
policy rates

The pace of inflationary pressures in the economy based on WPI inflation is

somewhat moderating with the latest numbers for headline inflation in April
2011 standing at 8.6 percent. Though this is lower compared to 9 percent
registered in March 2011, the inflation level hovers much above what the RBI
considers as the ‘growth promoting inflation rate’, which is about 5 percent.
Annual inflation rate of 9.4 percent for 2010-11 also highlights the
continuous pressure the economy faces on the prices front.

In its Monetary Policy Review on 3rd May 2011, RBI hiked both the repo and
the reverse repo rate by 50 bps each to reach 7.25 percent and 6.25 percent
respectively to tame inflation. This is the ninth raise in the key policy rates
since March 2010. Further, RBI indicated that it would continue with its
current anti-inflationary stance since the upward risks for inflation continues.
The central bank also mentions that its current anti- inflationary measures
coupled with high global crude oil and commodity prices will moderate the
growth rate.

Based on this growth and inflation scenario, FICCI asked the participating
economists their view on the inflation rate around which the central bank
should take a pause with regard to tightening of the key policy rates.
Majority of the economists said that the RBI should stop its current anti-
inflationary rate hikes when the inflation moderates to around 7 percent to
7.5 percent. However, few opined that the rate hikes may continue till the
inflation come down to 6 percent. They expect that the RBI will further
increase the repo rate by another 50-75 bps in this rate hike cycle.

The survey participants feel that inflation may further accelerate over the
first half of the fiscal year, before beginning to moderate. They believe that
14 | P a g e
the headline inflation may even breach a 10 percent mark once effects of the
expected increase in diesel/ LPG/ kerosene prices takes hold. The supply side
mismatches in some commodities like vegetables, fruits, pulses, milk and
eggs will continue to add to the inflationary pressure.

The economists estimate that though the inflationary pressures are expected
to persist in the near term, it is likely to moderate to the around 7 percent by
the end of fiscal year 2011-12. The likely reasons cited for this moderation
are:

• Expected stability in the international crude oil price as the

overreaction in oil prices to the problems in the Middle – East is
calming down

• Likely downward movement in the international commodity prices

• Expected measures to be taken by the domestic government to

improve supply side bottle necks

• Possible lagged impact of the successive policy rate hikes coming in to

play and impinging on demand side pressure of the inflation

Only when the headline inflation, core inflation and global commodity prices
begin to show a trend of moderation, the economists expect the RBI to
approach the end of its rate hike cycle.

It is interesting to mention that a couple of the economists are of the view

that RBI should target only non- food inflation and not the food inflation.
Further, it is suggested that a pure monetary approach to manage the
inflation arising of supply side rigidities is a wrong approach and it is the duty
of the government to make the effort to bring down the food inflation.

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FICCI Economic Outlook Survey –May 2011

♣ Economists’ views on considering a ‘new normal’ range of 6 to

7 percent for inflation

According to RBI’s experience a high growth has coexisted with low inflation.
The central bank has maintained a threshold level of inflation within which
the growth can accentuate. As per this, RBI considers a 5 percent mark as
16 | P a g e
the comfortable level of inflation to accelerate growth. With WPI inflation
being constantly high in the range of 8 to 10 percent for the last so many
months, there is an increased discussion amongst the economists and policy
makers on whether to consider a higher level of inflation as the ‘new normal’
against the 5 percent mark presently considered normal by the RBI.

Considering the current inflation dynamics, we asked the surveyed

economist the need to consider a 6 to 7 percent range of inflation as the new
normal. Though this invited a mixed reaction, majority of the economist
agreed that Indian economy has to accept a new normal. While most of them
agreed to a 6 percent level as the new normal, few economists said it could
be even a 7 percent mark considering the changing trend of inflation as well
as the structural demand – supply mismatches.

However, few economists strongly opposed the consideration of a new

normal level for WPI inflation. According to them, the current high inflation
trend is expected to slow down gradually once the prevailing upward risks of
inflation settle down. They opined that with a good agricultural harvest, the
food prices tend to soften. And also, the initial hike in the oil prices due to
the problems in Middle- East is also calming down. Setting a higher normal
level will only prevent a push for structural reforms that are urgently needed
to reduce the general level of inflation and also will exacerbate inflationary
expectations.

It was strongly suggested that government may continue to bring down the
current inflation by debottlenecking both the agricultural and the
manufacturing sector. In agriculture, the respondents feel an urgent
requirement to take steps to increase productivity and improving supply side
management of food products. Also to tame the inflation in the
manufactured products, steps must be taken to augment supplies of
industrial inputs via greater investments in these sectors.

FICCI Economic Outlook Survey –May 2011

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♣ Economists’ views on recent dip in FDI inflow and outlook for
FDI inflow in 2011-12

Data on foreign investment flow shows that FDI inflows in the country in the
year 2010-11 have seen moderation (USD 27.02 bn) as compared to inflows
received during 2009-10 (USD 37.76 bn). It may be mentioned that this dip
in FDI flows into India has taken place at a time when FDI flows to some of
the other emerging markets have gone up in 2010 as per the findings
released by UNCTAD on global investment trends earlier this year. This
slowdown in FDI flows is a matter of concern as FDI flows are of a more
durable variety and often come with many tangible and intangible benefits.

RBI – has set up an internal working group to look into this development and
try to understand the reasons for this slowdown. While we wait for the
findings of RBI’s internal working group on this subject, it may be mentioned
that in January this year RBI had alluded to the environment sensitive
policies being pursued appear to have affected investors’ sentiments. Senior
officials in the Industry Ministry have also expressed apprehension over
slowing down of FDI and made a strong case for further liberalization of the
FDI policy framework in the country.

Given the importance of this issue, FICCI asked the view of surveyed
economists on the reasons for the slowdown in FDI during the last fiscal
2010-11. Most of the economists agreed that the main reason for this could
be the subdued recovery in the west and domestic issues of land and
environment, high inflation and corruption cases. However, one of the
respondents felt that the FDI flow India received during the fiscal 2010-11 is
not unsatisfactory as the investment we received during 2009-10 was one of
the highest and such flow cannot be expected to repeat every year.

Survey captured following reasons for the dip in FDI inflows to India during
2011-12:

• General slowdown in the international market:

o Re- emergence of sovereign debt related issues in the Euro zone,

weak recovery of the US economy and problems in Japan led to
uncertainties in the global market

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 o FDl flows have had a weak growth generally in 2010 as
investment cycle is yet to pick up worldwide due to global
slowdown

• Expected slowdown in the domestic market: India’s macroeconomic

stability coupled with the large potential of market was a big lead in
attracting the FDI flows. However, RBI has echoed that growth may
have to slowdown in order to tame the high inflation. This could have
prompted the investors to wait and watch how the domestic situation
moves

• Emergence of other competent economies: India received a good FDI

inflow during 2009-10, soon after the global melt down, as the country
was seen as the brightest destination amongst the emerging markets.
However, as the world economy recovers, funds are moving to other
competent emerging economies as well, posing a reduction in FDI flow
to India.

• Governance issues:

o Most of the respondents mentioned that one of the important

factors that might have affected investors sentiment in the
recent past could be the environment sensitive policies causing
delays to the projects with regard to the mining sector,
integrated township projects and construction of ports.
o The recent spate of corruption scandals must have weighed
down the investors sentiments about the investment climate in
the country
o Long standing issues like lack of infrastructure, problems in land
acquisition, procedural delays etc. continue to limit the FDI
inflows in the country
o Also, foreign investors planning to enter the retail space as well
as banking in India or increasing their stake in insurance
ventures are still awaiting the required policy changes. Such
regulatory uncertainties have vitiated the investment climate in
the country.

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Against this back drop most of the surveyed economist expect that the FDI
inflow to India during the fiscal year 2011-12 will remain subdued. However,
economists are optimistic that fuller recovery in the mature economies,
together with Indian Government’s action on easing barriers and improving
the ease of doing business would increase FDI inflows in the future. Also,
with UNCTAD projections predicting higher growth in global FDI in 2011, few
of the respondents feel that some amount of these investments will flow to
India as well.

♣ Annual Forecasts of GDP at Factor Cost for 2010-11

Key Macroeconomic Annual Forecast 2010-11

Variables Mean Median Max Min

GDP growth rate at factor 8.5 8.6 8.6 8.2

cost (%)
Agriculture & Allied 5.6 5.4 6.5 5.0
Industry 8.1 8.1 8.4 7.8
Services 9.7 9.6 11.0 9.2
FICCI Economic Outlook
Survey – May 2011

♣ Annual Forecasts for 2011-12

Key Macroeconomic Annual Forecast 2011-12

Variables Mean Median Max Min
1 GDP growth rate at factor 8.2 8.0 8.8 8.0
cost (%)
Agriculture & Allied 3.5 3.7 4.2 2.2
Industry 7.9 8.0 8.7 7.0
Services 9.5 9.2 10.5 8.7
2 Fiscal Deficit (as % to 5.2 5.0 6.5 4.8
GDP) Centre
3 Prime Lending Rate (%) 5.0 5.0 5.0 5.0

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4 WPI Inflation rate (%) 6.4 6.7 7.2 5.0
5 Growth in IIP (%) 7.9 7.9 9.1 6.5
6 Merchandise Export 20.4 20.0 25.0 16.0
growth (%)
7 Merchandise Import 21.1 20.3 24.0 18.0
growth (%)
8 Trade Balance (% to GDP) -7.7 -7.7 -7.4 -7.8
9 Current Account Balance -2.9 -2.8 -2.5 -3.3
(%)
1 US$ / INR exchange rate 43.8 43.7 46.0 41.8
0
FICCI Economic Outlook
Survey – May 2011

♣ Quarterly Forecasts for Q4 (Jan-Mar) of 2010-11

Key Macroeconomic Quarterly Forecast

Variables Jan- Mar (Q4 2010-11)
Mean Median Max Min
GDP growth rate at factor 8.2 8.2 8.5 7.4
cost (%)
Agriculture & Allied 5.9 5.8 8.7 4.6
Industry 5.4 5.3 6.7 4.0
Services 10.1 10.1 10.5 9.7
FICCI Economic Outlook
Survey – May 2011

♣ Quarterly Forecasts for Q1 (Apr-June) of 2011-12

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 Key Macroeconomic Quarterly Forecast
Variables Apr - June (Q1 2011-12)
Mean Median Max Min
1 GDP growth rate at factor 8.1 8.1 8.6 7.4
cost (%)
Agriculture & Allied 4.1 4.0 5.9 3.0
Industry 6.3 6.5 7.2 5.0
Services 9.6 9.3 10.4 9.0
2 Prime Lending Rate (%) 9.3 9.3 9.3 9.3
3 WPI Inflation rate (%) 9.0 9.1 9.5 8.5
4 Growth in IIP (%) 7.1 6.8 8.8 5.3
5 Merchandise Export 30.0 30.0 30.0 30.0
growth (%)
6 Merchandise Import 25.0 25.0 30.0 20.0
growth (%)
7 Trade Balance (% to GDP) -8.6 -8.6 -8.6 -8.6
8 Current Account Balance
(%)
9 US$ / INR exchange rate 44.8 45.0 45.0 44.1
FICCI Economic Outlook
Survey – May 2011

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